About Global Aging
There are two forces behind global aging. The first and quantitatively more important force is falling fertility. People are having fewer babies, and this decreases the relative number of young in the population. In every developed country, with the single exception of Israel, the total fertility rate (TFR), a measure of average lifetime births per woman, has fallen beneath the 2.1 replacement rate needed to maintain a stable population from one generation to the next. Most developed countries have been beneath the replacement rate for decades, and many are far beneath it. As of 2023, the TFR was 1.6 in the United States. In Western Europe it averaged 1.5, in Japan it was 1.2, and in South Korea it was just 0.7.
The trend toward smaller family size began in the developed world, but it has now overtaken most of the emerging world as well. Since 1975, the TFR in South Asia has fallen from 5.5 to 2.2. In Latin America it has fallen from 4.6 to 1.8, and in East Asia it has fallen from 3.3 to 1.0, less than half of the rate needed to replace the population. In 1975, just one-fifth of the world’s population lived in countries with below-replacement fertility rates. Today two-thirds do.
The second force is rising life expectancy. People are living longer, and this increases the relative number of old in the population. Worldwide, life expectancy at birth has risen by fifteen years over the past half century, from 58 in 1975 to 73 in 2023. In most developed countries life expectancy is now in the early eighties, and in some emerging markets it is as high or nearly as high. In Mexico and Bangladesh life expectancy was 75 in 2023, in Malaysia and Turkey it was 77, in China and Iran it was 78, in Saudi Arabia it was 79, and in Chile it was 81.
Together, these trends are leading to a dramatic aging of the population. In most developed countries, the elderly share of the population has already reached 20 percent. By 2075, according to the UN, it will have reached 30 percent in many of them and in some, including Italy, Japan, and South Korea, it will be approaching or passing 40 percent. The aging trend in many emerging markets is even more striking, not because they are aging more than the developed countries are but because they are aging much faster. As recently as 1990, the elderly share of China’s population was just 5 percent. By 2023 that share had tripled to 14 percent, and the UN projects that by 2075 it will have tripled again to 42 percent.
Falling fertility is not only hollowing out the base of the traditional population pyramid, leaving it top-heavy with elderly, but is also leading to widespread population decline. Among the world’s fifteen largest economies, only Australia, Canada, and the United States are projected to experience any appreciable population growth over the rest of the century. In some of the world’s largest economies, the cumulative population decline will be enormous. By 2100, the UN projects that there will be 38 percent fewer Japanese than there are today, 41 percent fewer Italians, 55 percent fewer Chinese, and 58 percent fewer South Koreans.
Unlike most long-term predictions, there is nothing hypothetical about global aging. It is as close as social science ever comes to a certain forecast. Absent a Hollywood catastrophe like a colliding comet or an alien invasion it will surely happen. The reason is simple: The elderly of the year 2050 or 2075 have already been born and can therefore be counted, and although the number of younger people cannot be projected as precisely, no demographer believes that the long-term downward trend in birthrates will quickly reverse itself.
The challenges posed by global aging are as vast as the demographic transformation itself. Government budgets will come under intense pressure from rising expenditures on retirement and health-care benefits. Economic growth will slow as workforces gray and contract, rates of savings and investment fall, and productivity growth declines. Businesses will have to cope with a dearth of young workers, while families will have to cope with a surplus of frail elders. Aging electorates may favor consumption over investment, the past over the future, and the old over the young, Even the global balance of power may shift as the developed world contracts demographically and economically relative to the emerging world.
The good news is that we are by no means helpless in the face of global aging. With wise policymaking, most of the challenges can be overcome and most of the burdens can be ameliorated. We can enact timely retirement and health-care reform. We can adopt new pronatal and immigration policies that help to slow the pace of global aging. We can boost economic growth by encouraging longer and healthier work lives. And we can prepare for and diffuse the geopolitical tensions between rising and declining powers.